The Government Casino

I have a long-running bit, made mostly in jest, that America's cash flow is a giant funnel, with Las Vegas at the bottom. All that glitz and over-the-top-ness has been funded by decades of one reality: In the end, the house always wins.

Casinos don't care much if you win or lose, and indeed they like it when people win big at the craps table or blackjack or the slots or roulette or any of the dozens of other games they offer. They care that you play. They know the math, and that math is inexorable. Play long enough, and the house will make its vig. The vig - that house "edge," the mathematical fraction that comes their way even from the most skilled players - is what they live on and for. It's not a large fraction for the traditional games, in the vicinity of 1.5% for "basic strategy" blackjack, the craps pass line, baccarat, and some others and creeping up to 2.5% for roulette. Other games or bets have much larger house edges, but we're still talking mid-teens even for the 'tightest' slot machines.

The message? The casinos don't want you to come in and lose all your money in fifteen minutes. Their product is entertainment, and many, myself included, consider putting a "within your means" chunk of money at risk for several hours of gambling adrenaline. They know this, and they want you not only to play, but to keep coming back, to be a regular customer, who also eats at the restaurants, spends in the shops, pays for spa treatments and other 'nice things' and so on. That a larger and larger part of casinos' revenue comes from not-gambling is an interesting phenomenon, but it doesn't change the reality - the notion is to keep you engaged so that you can be slowly, sedately, and voluntarily separated from your money.

To repeat, it's all about the vig.

It occurred to me this morning that the parallels with big government are too obvious to ignore.

Government is also all about the vig. It is a giant machine whose main purpose is self-perpetuation, which offers all sorts of incentives to people, both broadly and specifically (just as casinos grant perks to their high rollers, government finds endless ways to bestow largesse to the favored), in order to keep them in the "big government" camp. There are 9 million people who work, directly or via contract, for the federal government, and another 16 million at the state and local level.

All these jobs rely on the vig.

Few to none of these jobs are wealth-creating.

That vig, consisting of taxation and other forms of goose-plucking, sucks productive money out of the economy, slowing growth, unbalancing markets, creating moral hazard, and causing harm in myriad ways.

Casinos are honest. Everyone knows what to expect when they go to Vegas or Atlantic City or one of the 474 Indian casinos or the horse tracks or the new casinos that some states are permitting. The house always wins in the end. People play for the thrill, and some may come out ahead in the short run (walking away with the casino's money in your pocket is incredibly satisfying), and indeed some may actually be net-winners (see: the big lotteries) across a lifespan, but in the aggregate, the house always makes its money, and anyone who doesn't know this is either willfully eyes-closed or can't be bothered to give it fifteen seconds of thought.

The government, however, is a pack of lying, dishonest, covetous sacks of [redacted]. Politicians routinely tell us how they plan to "invest" our tax dollars, suggesting there's a positive rate of return heading our way. That's patent nonsense. There are some essential functions that provide a generalized benefit (defense of our rights via courts and policing, national defense), and there are things like roads which we've chosen to manage via government, but that's just a sliver of the overall picture. The reality is that government, apart from being inefficient, wasteful, and almost criminally negligent in fiduciary duty, doesn't "invest." It spends, and that spending is a combination of self-sustainment (see: the 25 million employees) and "investing" in its own perpetuation (see: vote-buying via handing out Other People's Money, crony politics where a few thousand bucks of campaign contribution gets you millions in government contracts, cynical marketing that promises all your problems solved if you keep voting them back into office, and so forth).

That funnel I mentioned? Its outlet isn't Las Vegas. It's Washington D.C., the state capitals, and the local treasuries. Money in America swirls within, but some always comes out the nether end and flows into bottomless maws. Within the funnel are a passel of crabs, each pulling the other down in an effort to rise above, to not fall to the bottom and out the business end of the funnel. But, rather than step over each other, and work to ensure that someone else gets shafted more, the real remedy is to shrink the hole at the bottom. To shrink government, to reduce the vig that leaches productivity and success out of the nation. And, above all, to ignore the shiny LED-and-chrome glitz and endless marketing that makes countless empty promises in favor of what we all know. Government doesn't care about us other than as geese to be plucked, addicts to be bled in perpetuity, and Matrix-like 'energy batteries' by which to sustain itself.

Yes, the "government is the problem" refrain is an old one, and I repeat it at the risk of jading the reader. But, its perpetual growth warrants a perpetual reminder, and every new metaphor and analogy offers at least a glimmer that someone still in thrall to the siren song might snap out of it and join those who already get it.